Friday, May 02, 2014

In the year 3330BC...
After painstakingly hand-carving a wheel out of redwood--a process that took three months--longtime employee KOR rolls it over to his corporate masters, UG and ZUG, to show off his work.

KOR: Here it is, bosses! My best wheel yet! I've got blisters on my hands that are so big they look like strawberries, and I lost two fingernails. I also smashed my thumb with a mallet so hard the bones popped out of my skin. But it's worth it, don't you think?

ZUG: Nice work, Kor. It's a beautiful wheel. You can roll it over to the Finishing Department, and they'll give you some detailed notes on how you can make it even better. Should only take you a few more weeks.

UG: In the meantime, get those blisters looked at. They seem to be infected.

KOR: I will. Thank you for nurturing me. I do have... um... a question, though.

ZUG: Yes, Kor? You know we're here for you.

UG: We truly do value the work you do for us. You've created many wheels for Ug and Zug's One Stop Wheel Shop, and we've sold every last one.

KOR: Yeah, you have. That's the thing. You see, I just spent ninety moons working on this wheel. Working hard. It doesn't seem fair to me that when you sell it, I only get 25% of the wholesale price. That only comes out to 12% or so of the selling price.

ZUG: But that's what we've always given you, Kor.

KOR: I know. It's just... well... I see some other wheelmakers, indepentdent wheelmakers, who are selling wheels on their own. And they earn 70% of the selling price.

ZUG and UG frown.

UG: I'm afraid we can't pay you more, Kor. The margins are too slim.

KOR: But I've heard you bragging about how you keep breaking sales records, year after year. Your profits are larger than ever.

ZUG: That may be so, but the wheel business has plateaued.

KOR: What do you mean?

UG: He means the tremendous growth we've seen in our market over the past few years is slowing down.

KOR: But it's still growing, isn't it?

ZUG: Yes. But not as quickly.

KOR: I don't believe that. More people are buying wheels than ever before. Just look.

KOR spreads out his hands, indicating the valley below. A valley heavily populated with indiginous peoples, all using wheels.

KOR: They all have wheels. Carts, wagons, baby buggies--that guy has a Humvee with wooden rims. And at least half of those wheels aren't Ug and Zug wheels. Those wheels were sold by the indie wheelmakers, not by middlemen.

ZUG: Where? I don't see anything.

UG: Me, neither.

KOR: But it's right in front of your eyes! Wheel sales aren't leveling off across the board. They're just leveling off for you.

UG: Sales are leveling off because the market has reached its saturation point.

KOR: I think the market is growing, but you're just getting a smaller piece of it because more and more customers are buying wheels from the wheelmakers. You're in denial.

ZUG: Unheard of.

UG: Outrageous.

ZUG: We've had record profits the last five years. How can we be in denial?

KOR: Why don't you share some of those profits with your wheelmakers?

UG: Saturation point. Remember?

KOR: Look, I make the wheels. Not you. I see many of your former employees selling wheels on their own, without you, and making more money than they ever did working for you.

ZUG: But who nurtures them?

UG: Exactly! Didn't I tell you to get your hands looked at because they're probably infected? That's what you get from working your fingers to the bone.

KOR: But I do it to make a living.

UG: Living, schmiving. You're an artist, Kor. Artists aren't supposed to make a living from their art. They're supposed to struggle and suffer. Besides, you artsy types don't understand the business end of things like we do. Let us handle the dollars and cents. You just worry about making those nice wheels.

KOR: Can either of you explain to me why I should continue to work for you?

ZUG: Easy. The prestige. All of the wheels you create have Ug & Zug carved on them.

KOR: I don't think wheel buyers notice that. Or care.

ZUG: We provide you with your hammer and chisel.

KOR: I can buy those for myself.

UG: What about all the benfits we give you?

KOR: You don't provide any benefits at all. And you only pay me twice a year.

ZUG: We have better distribution than you do.

KOR: Actually, I can reach as many customers with my wheels as you do with yours. See?

KOR takes the wheel he just made and rolls it down the hill.

KOR: And I can get them to market faster, control the price myself, and make much more money per unit sold.

ZUG: So go ahead and leave. There are a thousand wheelmakers willing to take your place.

KOR: Maybe. But for how long? It worked in the past, because you had a monopoly. You don't anymore. There is an entire generation of wheelmakers who won't ever consider working for you because they see no upside.

UG: We prefer to hear from the professional experts. The ones who get paid. Who tell us they're experts.

KOR: You don't think that skews the results a little? That perhaps you're paying for what you want to hear? Couldn't the expert be spinning things of sugar-coating them because he relies on you for his livelihood?

KOR: And what if these experts told you you're going to go out of business unless you immediately triple what you pay your wheelmakers?

ZUG: Then we'd act immediately.

UG: Agreed. By the end of the business day, we'd have found a new expert.

KOR: Look, I've just shown you that reaching customers on my own is as simple as rolling a wheel down a hill. I don't need you. But you need me. And I'm not going to make wheels for you anyore because I can do better on my own. Goodbye.

KOR walks down into the vallet as UG and ZUG watch.

UG: Did something just happen?

ZUG: No. I didn't notice anything.

UG: Me, neither.

ZUG: Want to go count our profits for this quarter?

UG: Sure. Then let's give ourselves bonuses.

ZUG: Now that's innovative thinking! Should we check with some industry experts first?